CLARY CORPORATION
1960 South Walker Avenue
Monrovia, California 91016
April 13, 2000
Dear Stockholder:
You are cordially invited to attend the 2000 Annual Meeting of Shareholders of
Clary Corporation. The meeting will be held on Wednesday, May 24, 2000 at 3:00
o' clock P.M., local time at the office of Clary Corporation, 1960 South Walker
Avenue, Monrovia, California 91016. I hope you will be able to attend.
Enclosed you will find a notice setting forth the business expected to come
before the meeting, the Proxy Statement, a form of proxy and a copy of the
Company's 1999 Annual Report.
Whether or not you plan to attend the meeting in person, your shares should be
represented and voted at the meeting. After reading the enclosed information,
kindly complete, sign, date and promptly return the proxy in the enclosed
envelope. No postage is required if it is mailed in the United States.
Submitting the proxy will not preclude you from voting in person at the meeting
should you later decide to do so.
Your cooperation in promptly submitting yours proxy is greatly appreciated.
Very Truly yours,
John G. Clary
Chairman,President and Chief Executive Officer
<PAGE>
CLARY CORPORATION
1960 South Walker Avenue
Monrovia, California 91016
NOTICE OF 2000 ANNUAL MEETING OF STOCKHOLDERS
April 13, 2000
The 2000 Annual Meeting of Stockholders of Clary Corporation will be held at
the Company's offices at 1960 South Walker Avenue, Monrovia, California, on
May 24, 2000 at 3:00 o' clock P.M., for the following purposes:
(1) To elect a Board of Directors for the ensuing year.
(2) To transact such other business as may properly come before meeting.
Only Stockholders of record at the close of business on April 3, 2000 will be
entitled to vote, either in person or by proxy. Additional information regarding
the matters to be acted on at the Annual Meeting can be found in the
accompanying Proxy Statement.
By Order of the Board of Directors,
John J. Guerin
Secretary
<PAGE>
CLARY CORPORATION
1960 South Walker Avenue
Monrovia, California 91016
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of Clary Corporation (the "Company") to be voted at
the 2000 Annual Meeting of Stockholders to be held on May 24, 2000.
Only holders of Common Stock of record, at the close of business on April 3,
2000 are entitled to vote at the meeting or any adjournment thereof.
The approximate date on which this Proxy Statement and the accompanying form of
proxy are first being sent to stockholders is April 13,2000
Votes cast by proxy or in person at the meeting will be counted by the Treasurer
of the Company. Shares represented by proxies that reflect abstentions will be
treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Abstentions, however, do not constitute
a vote "for" or "against" any matter and thus will be disregarded in the
calculation of a plurality or of votes cast on any matter submitted to the
shareholders for a vote.
Shares referred to as 'broker non-votes" (i.e., shares held by brokers or
nominees as to which instructions have not been received from the beneficial
owners or persons entitled to vote that the broker or nominee does not have
discretionary power to vote on a particular matter) will be treated as shares
that are present and entitled to vote for purposes of determining the presence
of a quorum. However, for purposes of determining the outcome of any matter as
to which the broker or nominee has physically indicated on the proxy that it
does not have discretionary authority to vote, those shares will be treated as
not present and not antitled to vote with respect to that matter(even though
those shares mnay be considered entitled to vote for quorum purposes and may be
entitled to vote on other matters). Any unmarked proxies, including those
submitted by brokers or nominees will be voted as indicated in the
accompanying proxy card.
In the election of directors, the candidates for election receiving the highest
number of affirmative votes of the shares entitled to be voted for them up to
the number of directors to be elected by those shares will be elected. Votes
cast against a candidate or votes withheld will have no legal effect.
No shareholder shall be entitled to cumulate votes in the election of directors
(i.e., cast for any candidate a number of votes greater than the number of the
shareholder's shares) unless such candidate's or candidates' names have been
placed in nomination prior to the voting and the shareholder has given notice at
the meeting, prior to the voting, of the shareholder's intention to cumulate
votes. If any shareholder has given such notice, all shareholders may cumulate
their votes for candidates who have been nominated. If voting for directors is
conducted by cumulative voting, each share will be entitled to a number of votes
equal to the number of directors to be elected, which votes may be cast for a
single candidate or may be distributed among two or more candidates in such
proportions as the shareholder may determine. In the event that the conditions
precedent to cumulative voting are satisfied, the Board of Directors intends to
distribute ratably(or as closely thereto as is reasonably practicable so as not
to require fractional votes) among the nominees for office named in this Proxy
Statement any votes for which it holds a Proxy. If voting is not conducted by
cumulative voting, each share will be entitled to one vote, and the holders of a
majority of shares voting at the meeting will be able elect all of the directors
In such event, the other shareholders will be unable to elect any director or
directors.
On all matters other than the election of directors, each share of Common Stock
is entitled to one vote, and the affirmative vote of the majority of the shares
represented and voting at the meeting (which shares voting affirmatively also
constitute at least a majority of the quorum) is required for the shareholders
to take action. Assuming the presence of a quorum, the shareholders present at
the meeting may continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum, if any action
taken (other than adjournment) is approved by at least a majority of the shares
required to constitute a quorum. On April 3,2000, a total of 1,807,419 shares of
Common Stock was outstanding.
<PAGE>
ITEM 1
ELECTION OF DIRECTORS
Action will be taken at the meeting for the election of six directors of the
Company. It is the intention of the persons named in the enclosed proxy to
distribute the votes represented by the proxies which they hold among the six
candidates named in such proportions as they see fit. If any candidate should be
unable to serve or should otherwise be unavailable (which the Board of Directors
now has no reason to foresee), the proxy grants discretionary authority to vote
for other candidates. The directors elected at the meeting will serve until
the next Meeting of Shareholders and the election of their successors.
The following schedule sets forth certain information concerning the nominees
for election as directors including their principal occupation and business
experience during the past five years.
Nominees for Election to the Board of Directors
- -----------------------------------------------
DONALD G ASH
Mr. Ash, age 64, has been a director since 1972. He was President, Treasurer
and Chief Executive Officer of Clary Corporation from June 1973 to December 31,
1995. Mr. Ash is currently semi-retired and part-time Treasurer and Assistant
Secretary of Clary Corporation.
JOHN G. CLARY
Mr. Clary, age 73, has been a director since 1972 and the Chairman of the Board
of Clary Corporation since 1976. He is also the President and Chief Executive
Officer of Addmaster Corporation, a manufacturer of business machines. Mr. Clary
is also a stockholder and Director of Addmaster Corporation. Mr. Clary is the
father of John P. Clary and Hugh L. Clary.
JOHN P. CLARY
Mr. Clary, age 42, has been a director since 1987. Mr. Clary is the Director of
Engineering of Addmaster Corporation and has been a Director of that Corporation
since November 1984. He holds a Ph.D. in Electrical Engineering from Stanford
University.
HUGH L. CLARY
Mr. Clary, age 39, has been a director since 1992. Mr. Clary has been a
Vice-President and Secretary of Addmaster Corporation since 1989. He holds a
Masters in Business Administration from Duke University.
RUSSELL T. GILBERT
Mr. Gilbert, age 70, has been a director since 1996. Mr. Gilbert served since
1959 to 1995 as Founder, President and Chief Executive of CIMCO, Inc., a plastic
products company. Mr. Gilbert also served on Clary Corporation's Board from 1972
to 1983.
JOHN J. GUERIN
Mr. Guerin, age 74, has been a director and Secretary since 1971. Mr. Guerin is
a practicing attorney.
The Board of Directors Recommends A Vote FOR The Election of All The Nominees to
The Board of Directors.
<PAGE>
BOARD OF DIRECTOR MEETING AND COMMITTEES
The Board of Directors held two (2) meetings during fiscal 1999. During fiscal
1999, each of the current directors attended at least seventy-five percent (75%)
of the meetings of the Board of Directors and the committees in which they
served (during the period that they served).
The Board of Directors has Audit,Compensation and Executive Committees. The
Company has no standing Nominating Committee.
The Audit Committee, which consisted of Mr. Gilbert and Mr. Hugh L. Clary,
met once during fiscal 1999. The Audit committee, among other things,reviews the
scope and results of audit and non-audit functions and budgets the expenses of
the Company.
The Compensation Committee, which consisted of Mr. John G. Clary (Chairman of
the Committee), Mr. Gilbert, and Mr. John P. Clary, met once during fiscal 1999.
The Compensation Committee, among other things, reviews and approves or amends
the recommendations of the President of the Company as to appropriate
compensation for the key employees of the Company, periodically reviews the
general compensation levels for executives in similar industries and makes
recommendations to the full Board with respect to compensation of the President.
The Executive Committee, which consisted of Mr. Ash, Mr. John G. Clary, Mr. John
P. Clary and Mr. Guerin, meet once during fiscal 1999. The Executive committee
exercises all the powers and authority of the Board of Directors in the
management of business and affairs of the Company which are permitted by the
Bylaws of the Company to be exercised by the Executive Committee.
DIRECTOR COMPENSATION
---------------------
In 1999, Mr. Guerin received $350 per month for his services as Secretary of the
Company. He was the only director to receive compensation for his services on
the Board.
STOCK OWNERSHIP
---------------
Stock Ownership of nominated Directors and Executive officers:
<TABLE>
Amount of Common Stock Percent
Name of Owner Beneficially owned of Class
- -------------- --------------------- --------
<S> <C> <C>
Donald G. Ash 86,605 (1) 4.5%
John G. Clary 271,589 (2) 14.4%
John P. Clary 144,638 (3) 7.5%
Hugh L. Clary 89,902 4.7%
Russell T. Gilbert 42,000 2.2%
John J. Guerin 2,100 .1%
All executive officer and directors
as a group (6 persons) 800,583 (5) 41.6%
(1) Includes 733 shares issuable on conversion of 637 shares of the Company's
Preferred Stock
(2) Includes (i) 20,000 shares issuable on conversion of the Company's 9.5%
notes held by Mr. Clary's Living Trust, and (ii) 6,625 shares issuable on
conversion of 5,761 of the Company's Class "A" Preferred Stock owned by
Mr. Clary's Living Trust.
(3) Includes 50,000 shares issuable on conversion of the Company's 9.5% notes.
(4) Includes 110,000 shares issuable on conversion of Company's 9.5% notes,
7.358 shares issuable on conversion of the Company's Class "A" Preferred
Stock, and John G. Clary as Trustee with voting power for the Harland
W. Gerds Trust.
<PAGE>
PRINCIPAL STOCKHOLDERS
----------------------
The following table sets forth the only person known by the Company to own
beneficially five percent or more of the Company's Common Stock on April 3,2000
</TABLE>
<TABLE>
Amount and
Nature of
Beneficial Percent
Name and Address Ownership of Class
- ------------------- ---------- ---------
<S> <C> <C>
John G. Clary, Living Trust and as Trustee
For the J&B Clary Community
Property Trust 276,589(1) 14.4%
2850 Thorndike Rd.
Pasadena, CA 91107
John G. Clary as Trustee for the 158,749(2) 8.2%
Harland W. Gerds Trust
2850 Thorndike Rd.
Pasadena, CA 91107
John P. Clary 144,638(2) 7.5%
2320 Lambert Drive
Pasadena, CA 91107
Addmaster Corporation 921,258(2) 32.7%
225 E Huntington Dr.
Monrovia, CA 91017-5016
(1) Includes (i) 20,000 shares issuable on conversion of the Company's 9.5%
notes held by Mr. Clary's Living Trust, and (ii) 6,625 shares issuable on
conversion of 5,761 of the Company's Class "A" Preferred Stock owned by
Mr. Clary's Living Trust.
(2) Includes 50,000 shares issuable to Mr. John P. Clary, 40,000 shares issuable
to Harland W. Gerds and 400,000 shares issuable to Addmaster Corporation on
conversion of the Company's 9.5% notes also includes 440,000 shares issuable
to Addmaster Corporation on conversion of 55,000 shares of the Company's
Class "B" Preferred Stock.
<PAGE>
EXECUTIVE OFFICER
------------------
Richard W. Henson, 48, President of Clary Corporation from February 28, 1999 to
April 1,2000 has resigned to take a position with another company. He was Execu-
tive Vice President and Chief Operating Officer of Clary Corporation since
January 1, 1996. From 1992 to 1995 Mr. Henson was a working partner with Adept
Group Inc., a business development firm specializing in technical consulting.
From 1988 to 1991, Mr. Henson was President and CEO of White Gloves Executives,
Inc.
The following table sets forth for the fiscal year ended December 31, 1999,
certain information concerning compensation paid to Mr. Henson, the highest
paid officer of the Company.
SUMMARY COMPENSATION - TABLE
Annual Compensation (1)
</TABLE>
<TABLE>
Long-Term
Salary Bonus Compensation
Name & Principal Position Year $ $ # Options
- ------------------------- ---- ------ ----- ------------
<S> <C> <C> <C> <C>
Richard W. Henson 1999 84,000 - -
Executive Vice-President 1998 84,000 - 40,000
1997 84,000 - -
1996 84,000 - -
All other executive officers
as a group 1999 47,500 - -
1998 51,825 - -
1997 40,200 - -
1996 40,200 - -
1995 93,700 - -
(1) Mr. Henson did not receive any other annual compensation or perquisites or
other personal benefits, securities and property which is the aggregate
amount of such compensation exceeds 10% of the total of annual salary and
bonus reported for Mr. Henson. Mr. Henson has no long-term employment
contracts with the Company.
<PAGE>
Stock Option Plans
- -------------------
During the year ended December 31, 1999, there were no options granted or
exercised to any officers under the Employee Incentive Stock Option Plan
adopted in 1996 ("1996 Plan")
The following table reflects certain information as to options held by
Mr.Henson as of December 31, 1999:
</TABLE>
<TABLE>
No. of Unexercised Options
Excercisable Unexercisable
----------- ------------
<S> <C> <C>
Richard W. Henson 40,000 -
AFFILIATED COMPANY
- ------------------
Clary Corporation and Addmaster Corporation are affiliated due to both common
management and ownership. John G. Clary, Chairman, President and Chief Executive
Officer of Clary Corporation is also the President and Chief Executive officer
of Addmaster Corporation. Mr.Clary is also the major shareholder of both
Corporations. His sons Doctor John P. Clary and Hugh L. Clary are also Directors
of Clary Corporation as well as Officers and Directors of Addmaster Corporation.
Both of these gentlemen are also substantial shareholders in both Clary Corpo-
ration and Addmaster Corporation.
The following major transactions have taken place between Clary Corporation and
Addmaster Corporation over the past few years.
(1) During 1996 and 1998 Addmaster loaned Clary $325,000 and $75,000
respectively under 10.75% secured promissory notes. The loans are secured by
a second position to Clary's bank on all assets of the Company and were due
on April 16, 1999. These notes were extended on April 16,1999 to October 15,
2000.
(2) Clary purchased inventory items from Addmaster amounting to $650,000 in 1999
$603,000 in 1998 and $544,000 in 1997.
(3) During 1996 Addmaster loaned to Clary $400,000 in exchange for a $400,000,
9.5% convertible subordinated debenture due October 17,2000. At December 31,
1999 this debenture was extended to January 17, 2002.
(4) On December 31, 1998 Addmaster exchanged $150,000 in cash and $400,000 in
past due accounts payable from Clary for a $550,000, 9% long-term note due
January 15, 2000. Clary had the option to have Addmaster convert this note
for the new 7% Cumulative Preferred Stock. The Company excercised this
option on May 31,1999 and the $550,000 of notes were converted to Series "B"
Preferred Stock.
Amounts due from Clary to Addmaster at December 31, 1998 were included in the
following balance sheet accounts:
</TABLE>
<TABLE>
1999
---------
<S> <C>
Short-term notes payable $400,000
Accounts Payable $283.000
Long-term liabilities
9.5% subordinated convertible notes $400,000
MISCELLANEOUS
On the date of this Proxy Statement, management did not know of any other
business to be acted upon at the meeting, other than these described in this
Proxy Statement. Should other business be properly presented for action, the
proxies solicited hereby will be voted in accordance with the judgment of the
proxy holders.
A representative of Stonefield Josephson, the Company's independent public
accountants, is expected to be present at the meeting to make a statement if he
or she desires to do so and to respond to appropriate questions from sharehol-
ders.
If the enclosed form of proxy is signed and returned, it will be voted. Any
shareholder has the power to revoke such shareholder's proxy before it is voted.
A proxy may be revoked by delivery in writing a note to the Secretary of the
Company stating that the proxy is revoked, by a subsequent proxy executed by the
person executing the prior proxy and delivered to the Secretary of the Company,
or by attendance at the meeting and voting in person by the person executing
the proxy.
The cost of solicitation of proxies will be borne by the Company. In addition to
the use of the mails, proxies may be solicited by personal interview, telephone
or telegraph. It is anticipated that banks,brokerage houses and other custodian,
nominees or fiduciaries will be requested to forward proxy solicitation material
to their principals and to obtain authorization for the execution of proxies and
that they will be reimbursed for their out-of-pocket expenses incurred in
connection therewith. Director, officers and regular employees of the Company
may also solicit proxies by such methods without additional remuneration.
SHAREHOLDERS PROPOSAL
- ---------------------
At the time of the preparation of this Proxy Statement, the Board of Directors
of the Company had not been informed of any matters which would be presented for
action at the Meeting other than the proposals specifically set forth in the
Notice of Annual Meeting of Stockholders and referred to herein. If any other
matters are properly presented for action at the Meeting, it is intended that
the persons named in the accompanying Proxy will vote or refrain from voting in
accordance with their best judgment on such matters after consultation with the
Board of Directors.
Any proposal which a stockholder intends to present at the next Annual Meeting
of Stockholders, to be held in 2001, must be received in writing at the office
of the Company set forth on the first page of this Proxy Statement by January 8,
2000 if such proposal is to be considered for inclusion in the Company's proxy
statement and form of proxy relating to that meeting.
</TABLE>
